KAZ Computer Services has strengthened its business processing arm with the $72 million acquisition of Australian Administration Services (AAS) in preparation for a leap beyond the Asian-Pacific arena.
The deal will see AMP, AAS' former owner, take a $37.5 million stake in KAZ through shares as well as $34.5 million in cash. In turn, the transaction has secured KAZ a six-year $70 million outsourcing contract with AMP to carry out its business processing, cheque printing and document management functions.
According to KAZ managing director Peter Kazacos, the addition of AAS makes KAZ the largest provider of administration services for superannuation in Australia as well as boosting the business processes arm, which is fast becoming the company's main revenue source.
Meanwhile, KAZ has made its presence felt in Victoria, bagging three lucrative outsourcing deals with North Forest Products, Revenue Clearing House and Blockbuster Video for operations outsourcing, help desk and facilities management.
Combined, these three contracts represent a 150 per cent increase in the number of systems KAZ manages in Victoria and fits smoothly into the company's expansion frenzy, which will soon move to new pastures.
"We've had all these multinationals coming to graze in our backyard and I want to go and do the same thing to them," says Kazacos.
Ultimately, Kazacos has his sights set on the US market but is reluctant to engage without the right ammunition. "It's where a lot of companies falter, so I'd like to have a very strong Asia-Pacific operation to fall back on," he says.
The recent Federal Government IT outsourcing debacle has been surprisingly good for business, according to Kazacos, who feels that the all-or-nothing approach taken by the Government locked anyone but the really big players out of the market.
"When you're talking about outsourcing the whole operation, customers are only confident with the IBM GSAs and EDSs," he says.
Kazacos is enjoying the multinational backlash the report has created and adds that the only down side will be a short lull while people digest the recommendations.